If You Must Flip the Company, Hold Out for A Billion Dollars

“We are not building the company to flip it. We have turned down many acquisition offers. Fundamentally, I think that most acquisitions are not good for employees. The average Silicon Valley acquisition is, in the end, in the tens of millions of dollars or less. Think of some of the networks that have been created by the most successful company exits—the PayPal acquisition was for more than a billion dollars. That’s almost like an IPO in terms of the value that’s created, and look what has come out of that: Elon Musk running SpaceX and Tesla, Peter Thiel running Clarium and Founders Fund, Luke Nosek running Halcyon Molecular.

“Dropcam will be successful if we can create a dynasty of people like that. But you can only do that by aiming for large exits. So that is something that is really important to me: making employees wealthy, versus selling out for something that would just make the founders millions.”

This article was written in April 2013. They sold the company 15 months later.

Not only did he not hold out for a billion dollars, but this is positively ungoogly:

He thinks the lavish perks at many technology companies, especially the free on-campus meals, are a disguised form of mind control, designed to get employees to work 12- or 14-hour days.

http://recode.net/2014/05/23/dropcam-hires-longtime-apple-product-leader-andy-hodge/

Dropcam’s devices have surprising appeal, Hodge said. Originally, he wasn’t quite sure he and his family wanted an Internet-connected camera in their home. But now that he receives an alert on the one day a week that his 13-year-old son comes home early from school, he has begun to get the bigger picture — a camera that doesn’t just see things, but notices them.

“A lot of these ‘smart’ products today are just connected,” Hodge said. Dropcam is different, in part, because of the opportunity to incorporate machine vision and machine learning. “There’s a real opportunity not just to see your house but to notice something happened. You can take sensors and compute, and there’s a chance to make genuinely smart products.”

He sees the benign uses of technology, not the privacy-infringing uses.

http://recode.net/2014/06/20/googles-nest-buys-dropcam-for-555-million/

Online storage is the other part of Dropcam’s business model. The company charges $99 per year to save a week’s worth of video at a time. Last we checked, Dropcam said 39 percent of of consumers who buy its cameras pay for its cloud storage service as well.

Cloud storage seems like a great business model.

More about the Dropcam acquisition:

http://pandawhale.com/post/46227/googles-nest-acquires-dropcam-for-555-million-by-liz-gannes